SAA expansion delayed, not dropped

Following the cancellation of the Takatso deal, SAA’s ambitions are still very much intact, but are now deferred.

And the airline’s Chair, Derek Hanekom is positive and upbeat about a bright future for the airline.

Speaking on Radio 702, in an interview with Clement Manyathela on June 11, Hanekom said the termination of the Takatso deal had indeed had an impact on the airline.

“In our corporate plan for the five years ahead, we had built in a capital injection of R3 billion, (R1bn per year over three years).”

With that capital no longer a prospect, SAA’s single shareholder (the DPE) is approaching capital markets for investment and so the international route expansion plans that were on the table have had to be delayed.

The airline’s greatest expansion has been on the African continent, and most of those routes are very profitable, said Hanekom.

But it has for a long time had intercontinental aspirations and the first two overseas flights, São Paulo and Perth are already operational.

Among the other desired intercontinental routes Hanekom mentioned as being “high on SAA’s list” were London, New York, Washington and Frankfurt. He talked of the importance of international routes to tourism and of the early successes of São Paulo, Perth and Accra.

“Profitability has already been achieved on the São Paulo routes, especially the São Paulo – Cape Town route. “Perth has exceeded our expectations and is doing extremely well,” he said, adding that selecting routes where there were no existing direct flights to JNB or CPT was a good strategy.

He said Stats SA showed that visitors from Brazil more than doubled in Q1 of 2024 over Q1 of 2023. Also visitors from Accra almost trebled in Q1 2024 over Q1 2023.

“10 000 additional tourists from Brazil in the quarter means, if they spend a modest R10 000 each, there’s R10 million, just like that.” And that is just direct spend, ignoring the multiplier effect of tourism spend.

Hanekom said the impact of state capture of SAA and the influence of the mismanagement of the airline leading up to it being placed into business rescue had been massive.  

“The SIU has over 100 cases of corruption (in SAA alone). The people being investigated are no longer in the airline. When we resumed business, we had six aircraft, today it’s 13 aircraft, it will be 14 soon and before end of year we will end up with 21 aircraft. Yes, SAA was badly damaged but the recovery is quite remarkable.” He added that the airline already has the funds to acquire these additional aircraft.

“We’ll have to take a fresh look, we will discuss the potential of new routes with the new shareholder representative in the new government,” he said.

“With a change of government coming in,  the new responsible ministers could make a new decision as to whether they want a shareholder and what kind of share and terms they would offer to an investor.”